I have said for a long time that our ideas around outsourcing and partnership with expert companies needs to change. Most of the time when commentators talk about IT outsourcing there remains this idea of the powerful client and weak supplier, hoping to get a contract at any price.
This dated view has largely been modified by two changes in the way that companies consume IT services:
- Complexity; many services today are so complex that only experts can perform them well. For example, it’s not possible to internally manage the technology needed to create a great customer service platform for most organisations. So suppliers have become more important because they are the experts with the answers across all areas of business.
- Software As A Service; the way companies purchase their IT has dramatically changed thanks to the cloud and app store concepts. Now managers may buy software solutions without even asking the CIO because they are just buying a subscription to a service that sits on the cloud. Security is guaranteed and all they need is a connection to the Internet.
It’s noticeable that many trade associations and journals have been changing name recently. There is a strong move to disassociate their connection to outsourcing as a business strategy as this environment has become more complex – the new emphasis is just on sourcing. But nothing stands still, even the use of cloud-based systems is evolving. A recent report in ZDNet advises three areas to watch in 2018 for those with an interest in the development of the cloud:
- The Cloud Backlash; many companies will make mistakes when moving services to the cloud. Issues of control or compliance may cause a backlash so look for examples of companies who are further down the road when seeking case studies and examples of success.
- The Hybrid Cloud; you don’t need all your infrastructure to be in the cloud. Explore what might be essential to keep close and what can be moved, for example important data might be safer if stored internally.
- The CyberSecurity Impact; cloud services are generally more secure than in-house systems, but if you have a chain of different partners then this can be a source of weakness – is your system secure at all points?
I strongly agree with this analysis. It’s clear that buying IT services from cloud-based systems is the future (at least for now) but there is still plenty of scope for companies to get it wrong.